Question

Look at the given picture carefully and infer the income of the bank.

Choose the correct option from the following.

Options

• The difference between the amount deposited and borrowed by the bank to Reserve Bank of India. 

• The difference of amount of interest between what is charged from borrowers and what is paid to depositors.

• The difference of interest rate between what is charged from borrowers and what is charged from depositor.

• The difference between the amount deposited by the depositor and borrowed by the borrower.

Answer 1

The difference of amount of interest between what is charged from borrowers and what is paid to depositors.

Explanation:

This is how banks earn their income—by charging a higher interest rate on loans than they pay to depositors for their savings.